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Election Season, COVID-19, Bitter Spats Create Perfect Storm for Stimulus Negotiations

The drama could lead to a faster or slower resolution

Negotiations over America's next stimulus package will not resume until after the votes are counted and the races are called, that much is certain. But rising coronavirus cases, the election outcome and a battle of wills among three top US leaders is forming a triple-threat of complications that could either speed or delay the passage of a bill by weeks.

Economists forecast that surging cases of COVID-19 combined with a lapse in the few remaining stimulus benefits left, like expanded unemployment benefits, will hobble local economies and threaten to put "millions of Americans" at risk for having essential utilities shut off, like power and water (read more about the K-shaped recovery). Without more federal stimulus aid, state budgets could fall short by as much as $434 billion through 2022, according to an October report from Moody's Analytics.

Complicating the issue is an acrimonious turn in stimulus negotiation days ahead of the election, which saw top negotiators, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin, sling blame at each other over holding up a deal. The unfinished legislation -- which includes a second stimulus check and funding for a wide range of programs -- now hangs in the balance.

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